Online grocer Ocado has signed a partnership agreement with US retailer Kroger in which its technology will be used in the US for grocery deliveries.

FOOD & DRINK

Ocado to enter US with Kroger partnership

17 May 2018 | by The Retail Bulletin

As part of the deal, Kroger has agreed to buy a 5% stake in Ocado.

Kroger is one of the world's biggest grocery retailers with sales of $122 billion in its 2017 financial year.

Ocado said it is already working with Kroger to identify the first three sites in 2018 for the development of new, automated warehouse facilities in the US as it looks to identify up to a total of 20 over the first three years of the agreement. In the event of a failure to commit to the target capacity, Kroger will pay compensation to Ocado.

In the longer term, Kroger will retain exclusivity in the US conditional on it meeting market share targets or ordering an agreed number of customer fulfilment centres per annum.

Tim Steiner, Ocado chief executive, said: "The opportunity to partner with Kroger to transform the way in which US customers buy grocery represents a huge opportunity to redefine the grocery experience of Kroger's customers and create value for the stakeholders of both Kroger and Ocado.

“As we work through the terms of the services agreement with Kroger in the coming months, we will be preparing the business for a transformative relationship which will reshape the food retailing industry in the US in the years to come."

Ocado has also recently signed up Sweden's ICA, France’s Groupe Casino and the Sobeys Canadian grocery chain.